Buying property in Spain as a foreigner or non-resident: which tax you pay and what you declare afterwards

First, the identification number

Any dealing with tax consequences in Spain requires a tax identification number (Regulation on tax management and inspection procedures, Royal Decree 1065/2007, article 18.1). For a person without Spanish nationality, that number is the NIE, the foreigner identity number assigned under Organic Law 4/2000; anyone who does not have one must ask the Tax Agency for a tax identification number, beginning with the letter M, when they are going to carry out transactions with tax consequences (article 20 of the same Regulation). We check this before the signing date is set.

New or second-hand: VAT or transfer tax

The first question is not the price but who is selling and whether it is the first supply of the home. The first supply is made by the developer of a finished building and carries VAT. Second and later supplies are exempt from VAT (Law 37/1992, article 20.Uno.22.º, letter A), and for that reason they pay transfer tax (Impuesto sobre Transmisiones Patrimoniales Onerosas) instead (consolidated text of the Transfer Tax and Stamp Duty Act, Royal Legislative Decree 1/1993, article 7.5). One detail changes the tax: it is not a first supply when the developer sells after the home has been used without interruption for two years or more by its owner or by tenants without a purchase option, unless the buyer is the person who used it (article 20.Uno.22.º, letter A). A home sold as “brand new” can therefore pay transfer tax rather than VAT.

Second-hand in the Valencian Community: 9%

Transfer tax is a tax ceded to the regions, and its revenue belongs to the region where the property is located, not the buyer's (Law 22/2009, article 33.2). In the Valencian Community, for purchases taxable from 1 June 2026, the general rate on acquiring property is 9%, and 11% when the value transferred exceeds one million euros (Law 13/1997 of the Generalitat, article 13.Uno, as worded by Law 5/2025 of 30 May of the Generalitat). Purchases of the same registered property from the same seller within three years are treated as a single transfer for that rate (article 13.Ocho). There are reduced rates of 8%, 6%, 4% and 3% for specific cases, such as officially protected (VPO) housing or the first main home of buyers under thirty-five with an income limit (article 13, sections Dos to Cinco); they use the personal income tax concept of main home and require the purchase to be recorded in a public document, or formalised as one within the filing period for the tax (article 13, sections Seis and Siete, as worded after Law 5/2026 of 31 July of the Generalitat). Those rates are designed for people who will live in the home; someone moving to Spain may fit one of them, and that is checked before signing.

New build: VAT and the deed

The supply of a home by its developer is taxed at 10% VAT, including up to two parking spaces and the annexes transferred with it; commercial premises do not count as annexes (Law 37/1992, article 91.Uno.1.7.º). Officially protected homes under the special regime or of public promotion supplied by the developer are taxed at 4% (article 91.Dos.1.6.º). In addition, as the transaction does not pay transfer tax, the first copy of the deed pays stamp duty (Actos Jurídicos Documentados) (Royal Legislative Decree 1/1993, article 31.2), at the rate of the region where the Land Registry in which it must be registered is located (Law 22/2009, article 33.2). In the Valencian Community it is 1.4%, and 0.1% if the deed documents the purchase of the buyer's main home (Law 13/1997, article 14, sections Uno and Cuatro).

If you do not live in Spain, the home is declared every year

An urban home that is not let or used for a business generates deemed income for its owner, an individual who is not resident in Spain (consolidated text of the Non-Resident Income Tax Act, Royal Legislative Decree 5/2004, article 13.1.h), calculated under the personal income tax rules. It is 2% of the cadastral value, or 1.1% where the law treats the values as revised, in proportion to the days of the year during which you owned it. If on the accrual date the home has no cadastral value, or the value has not been notified to the owner, the calculation is different: 1.1% of 50% of the higher of two values, the one established by the Administration for other taxes or the purchase price; and while the home is under construction no income is attributed (Law 35/2006, article 85.1). Which revisions count in 2026, and the progressive scale that would apply from 2027, depend on Royal Decree-law 29/2026 of 6 October, which is awaiting validation by the Congress of Deputies, so we check it when preparing each return. The rate is 24%, or 19% if you live in another European Union Member State, or in a European Economic Area state with an effective exchange of tax information (article 25.1.a). It is declared on form 210, from 1 April to 31 December of the following year (Order EHA/3316/2010, article 5.b, as currently worded); the deemed income for 2025 is declared by 31 December 2026, under the previous rules. The transition deadlines are in our guide to form 210 for non-residents.

If you let it

Rent from a property located in Spain is taxed here (article 13.1.g). For residents outside the European Union and the European Economic Area, the tax base is the gross income, with no expenses, and the rate is 24% (articles 24.1 and 25.1.a). Residents of the European Union, or of the European Economic Area with an effective exchange of information, can deduct the expenses allowed by the Personal Income Tax Act if they prove that they are directly related to that income and have a direct and inseparable economic link with the activity carried out in Spain, and they pay 19% (articles 24.6.1.ª.a and 25.1.a). Where tax is payable, rental income is declared in the first twenty calendar days of April of the following year, separately or grouped (Order EHA/3316/2010, article 5.c.1.º). The 2026 transition deadlines are in our guide to form 210.

Tax representative: when you need one

It is not automatic. A person not resident in the European Union must appoint an individual or company resident in Spain to represent them before the Tax Agency, among other cases, when the Administration requires it because of the amount and nature of the income or because they own a property in Spain; and a person resident in a country or territory without an effective exchange of tax information, whenever they have assets located in Spain. For European Economic Area states outside the Union, the obligation does not apply where there are mutual assistance rules on information and collection. The appointment is notified to the Tax Agency within two months, with the representative's express acceptance (Non-Resident Income Tax Act, article 10.1).

If the seller does not live in Spain

When the seller is a non-resident without a permanent establishment, the buyer must withhold and pay over 3% of the price, or make the corresponding payment on account (Non-Resident Income Tax Act, article 25.2). That obligation belongs to the buyer, and it is prepared before signing. What happens afterwards to the seller, and what will apply to you on the day you sell, is in selling property in Spain when you live abroad.

How we handle it

Before signing we tell you which tax applies to the purchase, at what rate, and which requirements must be settled in the deed, and, if you are buying from a non-resident, the withholding. Afterwards we prepare form 210 every year, for the deemed income or for the rent, and tell you whether you need a representative. Everything is done remotely: documents arrive by email or WhatsApp, and before the Tax Agency we act under your power of representation, so your digital certificate stays with you. No return is filed until you know its amount and the reasons for it.